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The death of reform in the Capitol?

Despite well-heeled backers, two groups pushing for a constitutional overhaul of California’s government appear strapped for cash and must come up with millions of dollars to qualify reform initiatives for the November ballot.

Both groups, Repair California and California Forward, say they can do it in weeks — an April deadline looms – and a quick infusion of cash could change the picture dramatically.

But financial disclosure documents filed with the state paint a bleak picture.

“If it were easy, Californians would have done this long ago,” said California Forward spokesman Ryan Rauzon.

Repair California and California Forward favor different approaches to resolving the state’s dysfunction. Both have received widespread attention during the past year as the debate intensifies over California’s governance.

Repair California, backed by a San Francisco business-led coalition known as the Bay Area Council, wants a constitutional convention authorized by voters, the first in California since 1879. The group has two initiatives – one a constitutional amendment and the other an initiative statute — aimed at the November ballot. Both measures were cleared for circulation earlier this month.

Sacramento-based California Forward is backed by several major nonprofit foundations and headed by former Assembly Speaker Robert Hertzberg. It wants bipartisan, legislative approval of its proposed reforms, which revise the constitution, and wants the Legislature to place them on the ballot. The group’s changes include majority-vote budgets, long-term budgeting and protections for local government funding, among others. If the proposals don’t emerge from the Legislature, the group hopes to place them directly before voters in the form of two ballot initiatives.

If the legislative strategy fails, California Forward has threatened to gather signatures to place two consitutional revision measures on the ballot.

But Capitol sources say California Forward’s proposals face opposition in the Legisalture, some of it from legislative Republicans, virtually assuring that they have little or no chance of winning legislative approval, forcing the group to target the statewide ballot.

That means both groups will have to finance costly signature-gathering campaigns. At this point, according to financial disclosure records on file with the secretary of state, they don’t have the money to do so.

When asked whether they would pursue their constitutional revision via initiative, Rauzon said, “we’re pursuing both.” But California Forward leaders are meeting today to discuss tactics about how to proceed.

“The effort is still new,” he said. “We have to keep focused on both paths until the leaders of California Forward decide to pursue one strategy or the other. “The idea of a revision seems to be getting some momentum in the Legislature,” Rauzon added. “And some of that is due to the leadership from Darrell Steinberg, John Perez and Mark DeSaulnier” on reform issues.

Repair California, the reform group backing a state constitutional convention, raised more than $352,000 during 2009 – a significant amount but far less than the millions of dollars typically needed in California to gather signatures to qualify a pair of initiatives for the November ballot.

Some $300,000 of the group’s $352,141 came from two donors – San Francisco corporate management consultant Lenny Mendonca and the California Tribal Business Alliance.

Repair California spokesman John Grubb says the group has secured financial commitments that include $2 million from the Bay Area Council. And he says the group is on track to meet its fundraising goals of $3.6 million for logistical costs and signature gathering, plus $15 million to fuel the campaign once the initiatives qualify. The Bay Area Council is a San Francisco-area coalition of businesses and others who launched the drive for a constitutional convention.

The group’s staffing was expanded in December and its fund-raising efforts are proceeding apace, said Grubb.

“We’re happy with how the fundraising is going, and it’s ramping up – which is how it should go,” he said. He also said the group expected to spend 50 cents to 75 cents a signature. “Our commitments are coming in it looks like we’ll be fine to qualify for the ballot.”

Meanwhile, fundraising for California Forward also appears stalled. The group has $82,000 on hand and raised just $3,000 last year.

Ironically, as the reform groups struggle for funding, corporate interests already have qualified two measures for the June ballot.

One has a $3.5 million bankroll from Pacific Gas and Electric Co. Among other things, it would block locals from creating a publicly-owned and operated electrical utility district without a two-thirds vote. The other, pushed by Mercury Insurance chief George Joseph, would allow insurers to give long-term customers a discount, although critics say it would actually do precisely the opposite – it would punish consumers who shop around.

Qualifying grass-roots initiatives for the ballot is expensive because they require hundreds of thousands of signatures. A constitutional amendments requires 694,354 valid signatures of registered voters; an initiative statute requires 433,971 signatures.

Of the two initiatives sought by Repair California, the first is a constitutional amendment that would authorize a constitutional convention. The second, an initiative statute, would set up the logistical backbone for the convention – the staffing, the administration, the process, the scope, etc.

California Forward seeks constitutional revisions, which can be accomplished legislatively. If their proposals ultimately go before voters through signature-gathering, they would be in the form of constitutional amendments.

Typically, proponents of California ballot initiatives turn in far more signatures than required in order to ensure they have a sufficient number of valid signatures. A 40 percent surplus, or more, is not uncommon. Election officials validate the signatures through random checks.

Grubb said his group hopes to turn in 1.1 million signatures on the proposed constitutional amendment, and plans a similar over-submission on the statutory initiative. The two measures, which qualified for circulation last month, are being circulated as a package, he noted. He estimates that the signatures will cost 50 cents to 75 cents each, far below the estimates of professional signature gatherers.

He said his campaign has built its own signature-gathering firm to ensure that the initiatives qualify. Grubb also said that Repair California has been “blacklisted” by professional signature gatherers and intends to file a lawsuit against the industry.

“We are confident we will collect the signatures we need. That said, our defensive measures have cost us approximately a million dollars, necessitating requests for more volunteers and more donations,” Grubb said.

The cost of gathering signatures varies dramatically in California, and typically rises as the submission deadline approaches. Although it has hovered between $1 and $2 per signature for years, it has risen dramatically, to $3 or more, in some high-stakes ballot issues such as tribal gaming, insurance and the 2003 recall of former Gov. Gray Davis.

During the winter, it averaged about $1.55 to $1.65 per signature obtained by professional gatherers, according to one initiative-qualification expert.

For Repair California, that translates into about $1.75 million to qualify the constitutional amendment and about $1 million for the other – well within the group’s anticipated budgeting. Presumably, those costs will be cut further by circulating the petitions together, but just how much is uncertain.

Aside from signature gathering,
the costs of a full-blown media campaign also are high – for candidates, $4 million per week as Election Day nears is not uncommon — with television advertising consuming most of the campaign budget.

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